Our founder and CEO, Ralph R. Roberts, CRS, GRI, was interviewed for an article about investing in foreclosures that appeared in this past Sunday’s edition of The Tampa Tribune. As many people may know, Ralph wrote the book on investing in foreclosures and our staff here at Ralph Roberts Realty regularly helps people in the metro-Detroit area understand the pitfalls and upside associated with investing in foreclosures.

If you’re considering investing in foreclosures, read Ralph’s book, Foreclosure Investing For Dummies. In the meantime, here’s The Tampa Tribune interview:

The Tampa Tribune
Published: March 16, 2008

TAMPA - One in every 254 homeowners in the Sunshine State received a foreclosure filing in February. That’s the third-highest in the nation.

The foreclosure crisis is negatively affecting neighborhoods and the economy.

But like every crisis, this is viewed by some as an opportunity to profit.

As more homeowners and lenders get desperate to unload properties, they cut prices, making foreclosure homes enticing to real estate investors. Books on getting rich quick off foreclosures arrive on bookshelves daily, and experts are traveling the country holding foreclosure seminars. The process looks so easy that even people with no real estate experience are hanging out at county courthouses, poised to make offers on foreclosure properties.

With foreclosures on the rise and mortgage interest rates low, this may indeed be the perfect time to invest. But, experts warn, it’s easy to get trapped by pitfalls in the market. If you’re not careful, some warn, you may wind up in foreclosure yourself.

The Tampa Tribune interviewed three experts on investing in foreclosure properties and offers a sampling of their advice. The experts are:

- Ralph R. Roberts, co-author of “Foreclosure Investing For Dummies” and a real estate agent and investor in Michigan.

- Mike Kane, chief executive officer of St. Petersburg-based ForeclosuresDaily.com, which sells foreclosure data and holds classes on investing.

- Annalisa Burgos, real estate editor of FrontDoor.com, a Web site that features content from HGTV.

Don’t assume it’s a good deal just because the home is in foreclosure. And make sure you get a fair price.

“Sometimes people get caught up in the foreclosure hype and end up paying more for a home in foreclosure than they would pay for the same house down the street that’s not in foreclosure,” Roberts says. “Foreclosure homes are not always a good deal.

“People don’t realize that you make your profit when you buy and then you realize the profit when you sell. If you pay too much, you won’t make the profit on the back end. Even if you think you’re getting the home for a great price, you have to factor in the costs of fixing up the house.”

Do your homework.

Do a title search. Find out who all the lien holders are, and make sure you know the homeowner’s situation. You could get stuck having to pay those liens.

“Some novice investors can get into trouble when the lender holding the second mortgage forecloses before the main lender,” Kane says. “The investor may actually be buying the second mortgage and find out they still owe the first mortgage.”

Get an inspection, if possible.

Some deals that look too good to be true are just that, Burgos says. An inspection may show foundation, roof or termite problems. Some auctions don’t allow investors to conduct inspections before the sale, she says. Investors should be aware that at those sales, the deal may be final, even if the home has problems.

Some auctions will allow investors to tour the home. If that’s the case, Kane suggests you take a professional inspector or a friend with a good eye for problems.

Don’t wait for the home to work through the foreclosure process.

Buying a home directly from the homeowner, before a lender takes it back, could result in the best deals, the experts say. You can get lists of homes entering the foreclosure process at local courthouses or from some Web sites.

Frustrated homeowners are sometimes willing to give deep discounts to avoid a foreclosure on their record. Lenders who have a lot of foreclosure homes on their books are increasingly willing to accept short sales, which means they’ll allow the homeowner to sell the property for less than they owe.

This method isn’t best for most novices, Burgos warns, because it requires heavy negotiating with homeowners and lenders.

Don’t buy in a neighborhood with numerous distressed properties on the same block.

If multiple homes on the same street are in foreclosure, that could be a red flag that there was investor fraud in the neighborhood during the boom years, Roberts says. If that’s the case, homes may be overpriced, and you don’t want to invest there.

Walk the neighborhoods and talk to neighbors, he suggests.

“If the whole neighborhood is in trouble, you can’t fix that with your one investment home.”

Invest close to home.

Roberts recommends beginner investors print out a map showing where they work and where they live. Draw a triangle around the two locations and don’t invest outside of that area.

“You don’t want to drive 45 minutes to work and then have to drive 45 minutes more to get to your investment property,” he says. “You need to be able to get there easily and often.”

Buy and hold.

“In this market, people can’t even sell their own homes, so it’s difficult to quickly flip a foreclosure home,” Burgos says.

During the housing boom, investors bought homes and immediately flipped them to other buyers for a profit. That time is over, Roberts says. You can make a lot of money investing in foreclosure properties, he says, but you should be prepared to keep and maintain the property for several years.

I was discussing the mortgage meltdown with a colleague the other day, when we encountered an interesting question: Who do mortgage originators (brokers and loan officers) represent? Do they represent themselves, the lenders whose products they sell, or the borrowers?

As a REALTOR, my relationship with you–my customers–is clearly delineated. I have a fiduciary responsibility to you–either as a the buyer or the seller I represent. (The term “fiduciary” simply means that I must represent my client’s best interests.) In a case of dual representation, Realtors are expected to treat both parties fairly and equitably.

A professional’s responsibility varies according to the profession and the specific role the person plays. A stock broker, for example, is supposed to sell investments to clients that are in the clients’ best interests. Someone who sells cars, however, is responsible for acting on behalf of the dealership, not the person who’s buying the car. Condemning a car salesperson for trying to sell the buyer additional optional features the buyer didn’t really need would be insane.

In real estate transactions, fiduciary responsibility is not always so clearly defined, and I believe this is at the root of many problems in the industry. For example, is an appraiser (paid by the buyer) responsible to the buyer or to the bank who uses the appraisal to deny or approve a loan? In the best of all possible worlds, the appraiser’s job is to provide an accurate appraisal of a home’s value, but in the real world, this doesn’t always happen. At the direction of a homeowner, loan officer, or real estate agent, the appraiser may inflate the appraisal, fooling the lender into approving a loan it would otherwise deny.

The fiduciary responsibility of mortgage brokers and loan officers is even fuzzier. Like a car dealer, a loan officer is merely selling a product supplied by the lender. Like an investment broker, however, the loan officer has some responsibility not to saddle the borrower with an overly risky loan. As you can see, the role that the broker or loan officer plays between the lender and borrower is clouded in ambiguity.

I believe that this ambiguity led to many of the problems leading up to the mortgage meltdown. In some cases, loan officers were overly ambitious in representing the borrower’s interests, which resulted in mortgage fraud. In other cases, loan officers who were overly eager to sell the lenders’ products pushed risky loan products (subprime mortgages) on unwary borrowers. Ironically, by acting solely on the behalf of either the borrower or the lender, these loan officers served neither party. Both lenders and borrowers got stuck with bad loans.

Some states have passed legislation that gives mortgage brokers and loan officers fiduciary responsibility to borrowers, but that addresses only one half of the equation. Brokers and loan officers also have to protect the interests of lenders.

I don’t intend to make mortgage brokers and loan officers the scapegoats in the mortgage meltdown. There’s plenty of blame to go around. Real estate agents, appraisers, title companies, Wall Street, the Federal Reserve, legislators, politicians, and homeowners all share the blame. Unfortunately, mortgage brokers and loan officers play the role of gatekeepers and are saddled with an inordinate amount of responsibility. They must serve two masters in a way that is in the best interest of both parties.

Perhaps mortgage brokers and loan officers need to stop thinking about their vendors and their clients and think in more abstract terms. Instead of selling products from lenders or representing borrowers as clients, maybe they need to be committed to making good loans. In many ways, the relationship needs to be governed by the same rules that apply to dual representation in the real estate industry — if it’s not a good deal for everyone involved, then it’s not a good deal. As an added incentive, perhaps brokers and loan officers should have their compensation tied to the success of the loan rather than receiving a commission on each sale.

To learn more about my office’s approach to representing you–either as a buyer or seller–call our office at (586) 751-0000. As a full-service real estate company, we’re here to help you succeed!

From Detroit Free Press Business Writer Greta Guest (published on Tuesday, June 26, 2007):

Sales of new homes in the Midwest rose a robust 30.8% in May, while sales in other parts of the nation shriveled, according to a Commerce Department report today.

In May, 153,000 new homes were sold, up from 117,000 in April in the Midwest. But as compared to May 2006, new home sales dropped 14.5% in the Midwest.

“Where in the Midwest?” asked local Realtor Ralph Roberts, who has offices in Warren, Southfield and Washington Township. “I don’t see an increase in new construction in Michigan at all. It’s still soft.”

New home sales nationwide were down 1.6% from April, or an adjusted annual rate of 915,000. And they were off 15.8% from the May 2006 pace of 1.1 million homes.

Other regions of the country saw declines from the April pace including the northeast, with an 11% drop, the south, with a 7.3% decline and the west, with a 1.9% drop.

The median sales price of new homes sold in May was $236,100, a drop of 0.9% from the same month in 2006.

If you are thinking of buying your first piece of Macomb County real estate, you now have more options than at any other time in the history of the Detroit Metro area! Did you know…

• Bad credit is not as big a problem you think. If you have bruised or bad credit, lenders are more flexible and will help you buy. Even if you don’t have money for the down payment, there are options you can utilize.
• If you are not ready to financially commit but need to move, you have options. There are “Lease with Option to Buy” homes all over Macomb County. Sellers and even banks holding foreclosed homes are willing to offer this, just to get a small return on their homes.
• You have more buying power now. Think of it, a 6 percent interest rate on a mortgage gives you more house for the dollar. Additionally, some homes are discounted by as much as $25,000 to $100,000! These two factors working at the same time in Macomb County real estate are like pure gold in your pocket!
• You have more homes to view and compare. The inventory of homes for sale in Macomb County is staggering but it’s to your benefit. You can pick and choose the perfect home for you and your family.
• Sellers are thinking outside the box. Sellers are thinking creatively in order to get their homes sold. They are throwing in appliances, offering to pay some of your closing costs, and are willing to give a discount for new carpeting. Some sellers are even offering free vacations!

Take advantage of the unusual real estate market in Macomb County. Buy low and sell high later. It is a great investment!

For more information about buying your first home in Macomb County, contact Jeannie Sample: Your 24/7 Realtor at HomeCoach@hotmail.com, or call 810-614-2120 or 586-751-0000.

If you catch the doom-and-gloomnews on TV and in our newspapers, you would think we should see people hanging themselves from every visible yardarm in Macomb County and the metro-Detroit area. However, I am seeing new and exciting things happening this spring. The grip of winter is over and fear is lifting from people who are banding together! Putting aside their competitive instincts, other Realtors are calling me and we are working together to make things happen. We are not only thinking outside the box, but we are taking positive action.

In addition, homebuyers are peeking their heads out and making decisions again. The phones are ringing, the emails are filling up and homes are going on the market, which means more buyers are shifting.

With these facts in mind, if you are considering making a move, the time to act is now. In the dead of summer, it will be just that: dead. The Macomb County real estate market is very predictable in that regard. Sure, you will have to take less money for your home this year, but you will also get the deal of the century on your next home. There are deals out there that will simply amaze you. The key is to plan your Macomb County real estate move wisely and with care and take advantage of the spring surge.

Call Jeannie Sample for answers to all your Macomb County real estate questions: (810) 614-2120.

Here in April of 2007, studies show four distinctive positive buyer trends that will help sell your home:

1. We are having a baby boom here in the Metro Detroit area. It is very true! Macomb County homebuyers are having more babies in the last three years. The buyers that NEED, not WANT, are still out there buying and their tummies are out to here! Cramped quarters and living with Mom and Dad are forcing young buyers, with baby on the way, out to buy a home.
2. Our diversity in cultures is on a huge upswing. With that fact comes money from other areas! In addition, different cultures like different types of home. There is a rear for every seat and a seat for every rear, I say. We see this fact in Macomb County Real Estate all the time. This diversity helps sell all types of home in all areas.
3. Baby Boomers and Retirees are finally buying! After umpteen million years living in the same home, the Baby Boomers are retiring and finding a new place to live! This causes movement from part of generation who normally remained in one home for a long time in the Macomb County Real Estate market.
4. Pent-up Buyers will only wait so long. It is a fact that in Macomb County, people go through definite cycles of pent up buying sprees. In the last couple of years, with the Macomb County Real Estate market down, people stayed home and updated the home they currently own. Studies show that most people seek to buy another home once they have fixed up the old home. Right now, homes are being updated like crazy and it is only a matter of time when the itch happens and it starts a large scale buying spree. Don?¢‚Ǩ‚Ñ¢t believe it? Think of all the people you know and perhaps even yourself, that fixed up their home and proceeded to go home shopping within six months of the updates.

With these positive, forward moving facts, your home has a larger chance of selling. They drive the housing market in Macomb County Real Estate. That is a fact.

Remember, houses are still selling. The Multiple Listing Service for Macomb County keeps track of Macomb County Real Estate and homes sold. The statistics prove that we still have movement. It is those Sellers who get creative, target these four factors, and price their home correctly that get the Grand Prize: a Buyer.

Ah Michigan. The weather will be breaking soon, tulips popping and birds singing. It’s time for those of us thinking of selling our homes to do the famous dance: The Spring Spruce Up!

The best place to start is with a plan of action and assignments for every member of the family:

Saturday for the guys: Dad and son, attack the garage. Afterwards, they are rewarded with a night of yummies and action movies.

Saturday for the girls: Mom and daughter, attack the clutter in the house, dust and hit the cobwebs. Afterwards, they are rewarded by going to a jewelry party.

Sunday for the girls: Mom and daughter hit all the closets, straightening and cleaning them along the way. Finish by vacuuming the floors.

Sunday for the guys: It?¢‚Ǩ‚Ñ¢s raining, so the guys dive into the basement to categorize stuff and put it in bins. Then they hit the cobwebs.

Afterwards, everyone goes out for dinner and a movie.

If you make the project fun and family oriented, the tasks are easy to accomplish. Plan one month in advance before putting your home on the market. Since the entire family benefits from moving to a new home, so too must the entire family pitch in to help prepare home number one for the sale!

Consider this: Take lots pictures and make time to reminisce about stories related to the old homestead. After all, your home has been good to you, and your children will remember special things about it for the rest of their lives. Buyers love to hear stories about your home. It gives them the warm and fuzzies!

For more tips on doing the Spring Spruce Up dance, feel free to email me, Jeannie Sample, at HomeCoach@hotmail.com.

Fair warning to those ready to buy a home in Macomb County (MI). Once you and your loved one have gone giddy about your dream home, there’s always the signing process to get through.

Now, either right before or most commonly right after you sign the papers you will sense something zap you from the very pen you just used. This horrible feeling will travel up your arm and drain all the blood from your face. Your mouth will drop open and suddenly you will say, ?¢‚Ǩ?ìWHAT HAVE I DONE?!?¢‚Ǩ¬ù Sometimes the sensation lurks in your system, like a dreaded disease, and doesn?¢‚Ǩ‚Ñ¢t hit you until 3:00 a.m. in the morning of the next day.

Those of us in real estate call this ?¢‚Ǩ?ìBuyer?¢‚Ǩ‚Ñ¢s Remorse?¢‚Ǩ¬ù There are other symptoms that we recognize. The classic is the blood draining out of your face until you?¢‚Ǩ‚Ñ¢re as white as a marshmallow, no matter what race you are! I?¢‚Ǩ‚Ñ¢ve seen people break out into a sweat, literally start shaking, even look as if they are going to be ill. They push away from the table, drop their mouth open and men are the worse! They pace, they stammer, they get the deer in the headlight look like no other.

It is curable though. In fact, I just cured it for you! Once you know what it is, you will recognize it and it?¢‚Ǩ‚Ñ¢s diffused. When you wake up at 3:00 in the morning, you will know why you are tearing the sheets. So go back to bed, don?¢‚Ǩ‚Ñ¢t call the sales rep in the middle of the night, and know you made the best decision you could make. If you follow the tips in my ?¢‚Ǩ?ìHOME BUYERS TOOLKIT?¢‚Ǩ¬ù before you even look for a home, the dreaded Buyer?¢‚Ǩ‚Ñ¢s Remorse won?¢‚Ǩ‚Ñ¢t even hit you!

As you might have imagined, I have tons of tips for homebuyers and sellers. I would be happy to help anyone with their real estate needs in Macomb County, Oakland County (MI) or any other counties surrounding or in the Detroit Metro area. Contact me (Jeannie Sample) at HomeCoach at hotmail dot com or (810) 614-2120.

So you have decided to move your family. Thousands of people, all over Southeastern Michigan, start this process by turning their computers on and surfing the net for a home.

However, before you spend hours muddling through hundreds of homes for sale, let?¢‚Ǩ‚Ñ¢s take a look at an effective plan of attack. This can save you thousands of dollars and help you avoid costly mistakes. The tough times in Michigan are critical to your outcome, but there is a way!

• It is vital to search for a good lending institution. No, they are not all alike! This is your first call before the hunt begins. Call three mortgage companies or banks and give them an idea of what you are looking to spend. By law, they must give you a GOOD FAITH ESTIMATE of what you closing costs and rate will be. Often times, internet-financing companies and some companies attempt to do a bait and switch on your fees. In other words, the closing costs appear attractively low but by the time you get to the closing, they are substantially higher. Make sure you get your GOOD FAITH ESTIMATE! Shop and compare apples to apples with each bank and then decide on what program is best for you. There are thousands of mortgage programs available. There are even programs for buying a home that needs updating and they give you the money to update the home!
• You already have a home and equity is vital for the down payment on your next home. Forget that I am a Realtor, seriously, and heed my advice. In today?¢‚Ǩ‚Ñ¢s very difficult times for Michigan, you have to be EXACT and STRATEGIC in your home selling plans. The reason that there are so many homes on the market in Michigan and sitting well over a year is what I call: THE LACK OF THE REAL ESTATE REALITY CHECK! Here is what you need to have YOUR REALITY CHECK and sell your home within a reasonable amount of time:

1. The FBI is investigating appraisal fraud in Michigan, as we speak, in Michigan! What does this have to do with you? Plenty! Appraisers are terrified of being caught, so they have squeezed down their appraisal parameters. In other words, appraisers were able to bend a bit when it came to the bank appraisal done when your home sold. They used comparative SOLD homes up to one-year back and were flexible with square footage, condition etc. Now, appraisers are so nervous about their accuracy that they only go back a few months of SOLD homes and they had better be the exact same footage. With Michigan?¢‚Ǩ‚Ñ¢s housing market dropping in dollars by the month, this is going to hurt your wallet. Pay $250 and get an accurate appraisal done on your home. Find out what its worth BEFORE you get your heart set on a new home. Number two will give you another accurate barometer of what your home is worth.
2. OK, we know you don?¢‚Ǩ‚Ñ¢t want to hire a Realtor, but call one! They have the information you need! When I say call them, call an experienced full time agent who lives and breathes real estate. Make sure they know your community and what is going on with the market conditions TODAY, not six months ago. The Michigan market is highly volatile right now and you need someone with a pulse on the current conditions.
3. Here is the most important REALITY CHECK I can give you. When looking at the homes in your area and trying to find good comparables, the SOLD homes are the only ones that count! If Brenda down the street has her house for sale at $200,000, it doesn?¢‚Ǩ‚Ñ¢t mean her home or your home is worth that! She hasn?¢‚Ǩ‚Ñ¢t received the sold sign yet! I?¢‚Ǩ‚Ñ¢ve seen entire neighborhoods selling their homes at outrageous prices for the times we are in. Take a look at the homes for sale for only two reasons: what they are selling for and the DOM or Days on the Market. If Brenda has had her house on the market for 156 days at $200,000, she is asking too much for her home! Look carefully at the solds, at your square footage, in your same condition, in your neighborhood no farther than a one-mile radius, preferably less. Now take a good swallow of your favorite strong drink, gulp and that is what your home is worth in Michigan in these tough times.

Stay tuned for secret tips for finding the right home without searching for months and looking at dumps!

Did you know that you can become the envy of your friends and neighbors by creating a tax-free business out of buying and selling fixer-upper houses? It’s true, and Ralph Roberts Realty can show you how!

According to real estate expert Robert Bruss, by buying houses, fixing them up, and occupying them for at least 24 months before selling, you can earn upwards to $250,000 in tax-free profits (or $500k for a married couple where both spouses meet the occupancy test and file a joint tax return) for your hard work and efforts. Bruss says this process can be repeated over and over again, without limit, but not more frequently than once every 24 months. The same technique, he says, can be used on vacation and second homes that become your principal residence in order to meet the 24-month ownership and occupancy test.

For more information, start with the article located at this link, and then contact our office for more information.